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April 23, 2013

Our Unequal Recovery

From the WSJ:

Only Richest 7% Saw Wealth Gains From 2009 to 2011, by Neil Shah: ...
From 2009 to 2011, the average wealth of America’s richest 7% — the 8
million households with a net worth north of about $800,000 — rose nearly
30% to $3.2 million from $2.5 million, according to a Pew Research
Center report... By contrast, the average wealth of America’s remaining 93%,
some 111 million households, actually dropped by 4% to $134,000 from
$140,000. ...

The findings show that America’s economic recovery has been not just
sluggish, but painfully uneven in its benefits. Rallying stock and bond
markets have boosted the wealth of America’s most affluent... The upper 7%
of households held 63% of the nation’s wealth at the end of 2011, up from
56% in 2009.

As the article notes, "the one-sidedness of the U.S.’s recovery ... has been
supported by low-interest-rate policies from the Federal Reserve that have
helped push asset prices higher."
One of the things we need to think a lot harder about is how to
improve the distributional effects of monetary policy. I'd feel better
about taking care of the top 7 percent if it had somehow
trickled down to more jobs for struggling households, or if we had used
fiscal policy to address the
unemployment problem to a far greater degree than we did.